Anyone can hang out a shingle and call himself/herself a consultant, but finding a good one requires some homework. That’s because selecting the right consultant is like hiring a key manager , even if the business association is a brief one. That’s why it’s important to take the time up front to find the most qualified and best suited individual or firm for the assignment. Consider the following criteria: industry expertise, number of years in business, certification, overall knowledge, referrals from satisfied clients and even personality. Begin with Internal Decisions Before the search begins, start with a clear understanding of your objectives. What do you expect the outcome to be? Designate a primary contact or sponsor inside your company, someone who this consultant will be working with for direction, approval, review and advice. Understand the scope of the project. Not so much in terms of dollars, but time too. For example, you might look at it as an assignment that will take two to three days to complete, but a consultant might see it as a two to three month project. Without one side feeling like they’re giving away the store, an agreement will have to be reached in terms of how much time is realistically needed to complete the project. Determine if the project requires a multi-person engagement. Is a single consultant, consulting firm or group of consultants needed? Lastly, determine any critical elements in terms of timing. If there is no room for project extensions or other schedule changes, make sure everyone involved knows the exact deadlines and expectations in advance. However, once a system has been put into place, if things change within the organization, it is realistic to expect that systems changes will then be needed – do not expect a one-size-fits-all. Avoid Common Mistakes During the initial interview, when the environment can be likened to a sales situation, it is not uncommon for both parties to be guarded. Yet, without a full understanding of everyone’s roles and responsibilities, success is unlikely. It is unrealistic to expect a consultant to be able to fix problems within the company that are ingrained in the company culture. Consultants can work with and assist people, but if the company hasn’t solved a solvable problem, then there has to be reasons. Just bringing in a consultant generally doesn’t make those reasons go away. If the person or committee that originally set up a project changes substantially, it’s important to re-evaluate the project status at that time. Sometimes the replacement individual(s) either don’t want to do the task at hand or aren’t as convinced about the importance of the project as the original people. How likely is that to happen? Very, when someone quits, or is fired, or earns a promotion and moves to another part of the company and is no longer involved in the work or the outcome. This happens all the time, and when it does, it may pose a serious problem. Be realistic about the likelihood of directional changes and project expansion. Once into a project, it can become apparent that the project is more complicated than originally expected. If something bedevils the company, the project may be more difficult or problematic than everybody initially understood, and adjustments need to be made. An outsider really can’t make things happen internally. If the staff doesn’t “buy-in” to the project, regardless of what it is, they may misdirect or ignore the consultant and in one way or another derail the project. As in any relationship, both parties need to be involved for the relationship to work. If not, the relationship falls apart. Beware of consultants who don’t take the time to learn about your company and appear too eager to use an off-the-shelf approach. Be sure unincorporated consultants met the IRS’ requirements for independent contractor status to avoid subsequent tax penalties The same evaluation criteria should apply to consultants found through Internet broker services and the Internet search engines. While both offer new avenues to find consultants, they do not remove the need to carefully evaluate the candidates. Both may imply more with respect to qualifications and credentials than is applicable. Finding the Consultant The process of finding a consultant is not as easy as dialing 1-800-Consultant. Talk to peers and colleagues. Whom have they used in the past? Contact professional associations. Professional management consultants’ organizations often have services to help find consultants. If a license or certification is required, lists of potential candidates are available through licensing boards. Look for Certification The initials “CMC” following a consultant’s name means that he or she is a Certified Management Consultant and has met the certification requirements of the Institute of Management Consultants USA (www.imcusa.org). A CMC has at least three years of experience in the full-time practice of management consulting; has provided multiple references, (most of them officers or executives of clients served), has passed a qualifying interview by senior CMCs; and, has been examined to confirm understanding and commitment to the Institute’s Code of Ethics. The Interview Is the consultant listening to you? Does the consultant have preconceived ideas about the project even before knowing what it is? Are the approach and potential solutions unrealistic? When a group is to be involved on the project, interview individuals who will be working on the project before making a decision. Frequently those who make the initial contacts and presentation are not the ones who will be working on the project. Be comfortable with their approach and the compatibility of the consultant(s) and your company. Ask questions as well as listen to their presentation. For example: What is your applicable experience in the area under consideration? In your opinion, what are the most critical aspects of this project and what will you do to meet that challenge? Please discuss briefly any relevant projects you have completed. In what areas do you expect difficulties, either in the schedule or in the study/design? How do you plan to manage the project and from where? Why should we select you and/or your firm? Personality and Fit Choose the consultant who is inquiring and curious, somebody who wants to know and understand the company, the situation and the content of the project. Avoid an individual with preconceived ideas. Look for a friendly personality in order to overcome possible suspicion from company employees , somebody who is able to build a team, if needed, and effectively interact with the company’s personnel. Once into the project, if people are not working well together, initiate discussion and resolutions before people begin to take sides that harden over time. This will only serve to create as many problems as there are sides of the issue. Fees and Billing Typically the consultant’s bill is based on effort. In cases where the amount of effort can be easily determined before the engagement begins, the fee may be fixed. The fee may also be results-based if this is appropriate. In dealing with this issue, remember that how things go with outside consultants will be similar to using internal employees to perform these same activities when it comes to normal complications and delays that enlarge or lengthen the project. Since these dynamics are difficult to know or quantify before they occur, consultants tend to bill for the effort they invest in a project. In the same way that a project can expand internally it will expand using external consultants and with this expansion will come additional cost. To monitor and control project costs establish benchmarks, include regular progress meetings and reports, and timely billing. The more intense the activity, the more frequent the reporting. Meetings are necessary not only to keep the company apprised of what has been accomplished, and/or what is being worked on, but also to identify as early in the process as possible those things that might somehow compromise the project. Provide an opportunity for the project management team to ask the consultant how things are going. If people are having misgivings about anything, get those on the agenda as early as possible before they become major issues. Get regular billings from the consultant so you know what the costs are. Have a budget, and track the fees against the budget. If you have one person working half time, you get a certain level of cost. If you have ten people working full time, you have another. The goal is to know how quickly resources are being consumed. While an expectation about what the cost is going to be is important, it may be impossible for the consultant to come up with a firm amount initially. That’s because the consultant doesn’t know what’s going on internally in the company. In terms of equipment, costs are easily determined. However, dealing with a business process may not be quite as exact. Be realistic about expansions or changes. If the scope of the project expands significantly over what was initially discussed, expect this to be reflected in the compensation package. Reaping the Benefits Consultants can be an invaluable and cost saving resource to a company. They’re already trained to do the job. But just like any commercial transaction, define your terms and contractual obligations up front to ensure success. The fee and payment arrangements, agreed milestones and timelines for review and completion, reasons for which the contract may be amended or terminated, confidentiality aspects of your resources and professional liability should all be clearly defined to ensure success. Jerry Savin, CPA, CMC, is CEO of SITKA Systems, Inc., a Santa Monica-based management consulting firm. Mr. Savin specializes in information technology assessment and business information systems. He also teaches courses on business information systems and management consulting for universities and professional associations, including UCLA, the California Society of CPA’s (CSCPA) and the Institute of Management Consultants USA (IMC). For more information, call (310) 230-1470 extension 8947.